Horizon Charter -- Trustee: We need more oversight

$19.5M publicly funded school working on recovering ‘misappropriated’ monies
By: Jon Schultz, Journal Staff Writer
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A local school board agreed with recommendations from an independent auditor for more policy and oversight for Horizon Charter Schools.
The Western Placer Unified School District board of trustees is currently reviewing petitions for renewal of Horizon’s two charters, the one of its namesake and Partnerships for Student-Centered Learning, and board members had been struck with what little oversight was done by Horizon.
Terri Ryland, retained by Horizon to perform the audit after the public uproar over the midyear closure of one of its programs in Rocklin and Lincoln, presented her findings to Western Placer’s board Tuesday as she did for Horizon’s board Thursday.
At one point, as Ryland described Horizon’s board use of the Carver model of governance, which employs more of a hands-off approach, Western Placer board Vice President Brian Haley said, “Is that where they carve out the taxpayer?”
“A lot of money seems to be wasted or even misappropriated,” Haley said. “Without the oversight, public dollars are not being well spent.”
Founded in 1993, Horizon Charter Schools is the 15th oldest charter in California with multiple programs throughout Placer, Sacramento, El Dorado, Sutter, Yuba and Nevada counties with enrollment of around 2,700 students. Horizon has two programs in Auburn where 250 K-12 students meet at a site on Blocker Drive.
Horizon is funded more than 99 percent by public money, and its projected revenue for the current fiscal year is $19.5 million.
Ryland told the board of Horizon’s lengthy, expensive leases for sites in Auburn, Rocklin and Elk Grove, as well as more than $800,000 in tenant improvements, signed and reviewed by one person only — former Chief Business Official Cliff Bautista — and without Horizon’s board approval.
She said the leases, amounting to $556,000 annually, came with a prepayment of $300,000 to Group Access, the third-party management company brokering the deal, that she called “at best a gift of public funds.” The leases also had been marked up between 12 and 74 percent, according to the audit.
“It’s basically fraud,” Western Placer Board Member Paul Long said. “In my mind, it is.”
Also not coming before Horizon’s board were raises to a number of employees during a time of cutbacks and layoffs, the audit said.
Furthermore, there had been no official policy on vacation payouts, but a group of eight staff members had been taking them contrary to the employee handbook’s policy.
In Bautista’s case, that meant a payout of $24,000 or 405 hours, which was greater than the level allowed to accumulate, according to the audit.
As the authorizing agency, Western Placer is responsible for providing oversight at the local level of Horizon, and dialog from the board suggests it may be increasing its role as well if the charters get renewed.
Currently, Western Placer takes the most “minimalist” approach to Horizon’s oversight as allowed for by the law, District Superintendent Scott Leaman said.
“We need more oversight by Western Placer,” board member Paul Long said. “We might have some staff that needs to be assigned to that.”
It’s not that Horizon’s board acted against the law by not having policies for those areas outlined — charter schools are allowed greater flexibility than traditional schools — but Ryland said it is her recommendation that they implement more measures to, among other aspects, protect public money.
Western Placer’s board seemed to echo that sentiment.
“How do we know if they are playing by the rules if there are no rules?” asked board member Damian Armitage.
Horizon CEO Craig Heimbichner said changes according to Ryland’s recommendations have already taken effect or are in the process of being implemented. All contracts and agreements more than $25,000 now must go before the board for approval.
Heimbichner said Horizon is working with the Placer County Office of Education on recovering the “misappropriation of some of the funds under the past administration.”
Through “whistleblower laws and so forth,” that process at best would recover 40 percent of the funds to Horizon and the rest would be recovered by the state, “because it’s taxpayer money,” he said.
Horizon is no longer paying Group Access for any services, but the audit raised questions of the “propriety of the relationship” between Bautista, who moved to “full retirement” in February, and Group Access CEO William Brockmeyer.
About $900,000 worth of Horizon’s assets had to be written off as expenses this year, mostly from vacating its Rocklin site that it had invested more than $800,000 into for tenant improvements.
Western Placer board member Paul Carras said he sees Horizon taking “steps in the right direction” but “follow up is key.”
The October 2012 shuttering of its Rocklin site and ultimately the entire Accelerated Learning Academy, or ALA, resulted in uproar and allegations of financial and ethical wrongdoing from parents of displaced students. Including K-2 children in Lincoln, 305 former ALA students disenrolled from Horizon.
Two parents of former ALA students spoke at the public hearing, with Debbie Spray saying she supported renewal of the charters but not the administration, while Rebecca Fong called for replacement of Horizon’s governing board and administration before Western Placer renewed the charters.
Jon Schultz can be reached at Follow him on Twitter @Jon_AJNews